The second important factor is a sharp increase in the presence of professional owners/investors whose profitability parameters go beyond the real estate element to absorb the activity they are engaged in. When a party wishes to enter into an agreement with a management company, it must be aware that it is a complex legal and commercial relationship that requires understanding the essential difference between a commitment to a management contract and participation in a hotel lease. Among the considerations faced by parties to a real estate owner`s engagement with a management company are the following pros and cons: in Asia in the 1960s, particularly in Hong Kong, the HMA, once designed on the basis of a lease, was born. Today, it is a very long, detailed and comprehensive treaty that can be very complicated for those who do not know it. When considering investments in a hotel or gastronomic property, it is imperative to analyze solid and detailed forecasts of the company`s future cash flow forecasts. The international tourism consultant ASPI AG – Auer, Springer – Partner International (www.aspi.ag) recommends analyzing different scenarios for each hotel based on development forecasts for the respective hotel market. Forecasts of a realistic future rental rate are essential to determine the value of the hotel building at the end of the operator`s contract term. It is also necessary to assess cash flows in light of potential risks associated with the operating contract, to ensure that, even in the worst case, the investment more than adequately meets hotel investment criteria such as internal return (IRR) or return on investment. Talk to the world`s leading tourism advisors Auer, Springer and Partner (www.aspi.ag) or your hotel broker at ASP Hotel Brokers (www.aspimmo.com) for professional, neutral and competent advice when selecting and creating a rental, management or hybrid contract for your hotel or gourmet property. Keywords: Business Leasebusiness Leasing TourismHotel Management Risk Management Agreements A cap is a kind of advance account for cumulative losses in which payments are accumulated in order to differentiate between the result guaranteed by the management provider (hotel investor, hotel owner) and the actual result received. Once a certain maximum deficit is reached, the guarantee granted by the hotel administrator or operator ends. Normally, the hotel owner and the operator also agree to compensation in the event of future profit The hotel operator must purchase all furniture, furniture and equipment (“FF-E”) for the hotel and be generally responsible for all debts related to the transaction.
Hotel management contracts are often accompanied by licensing agreements that allow the use of brands (Hilton, Mercure, Pullmann, Novotel, Ibis, Sheraton, Ramada, etc.). The hotel owner`s profits are usually made up of the hotel`s operating results (owner`s EBITDA) reduced by a remuneration reserved for the operator. This contract form means that the hotel owner bears both the opportunities and risks of his investment and his hotel operation. Thus, most commercial obligations between the hotel industry players in Israel are based on leases, although there is another commercial contractual option for this commitment: the agreement with a hotel management company. These problems, which are very summarized to fit into the space constraints of this article, help to understand our chosen title. We did not mean that this mix or crossing between the types of contracts did not exist until now, but that it is now clear that these particular scenarios are becoming more and more widespread.
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